But Canon, for one, also sees the advantage of pairing up with the iPhone. It has an app called CameraWindow that allows devices to wirelessly access photos directly on the point-and-shoot camera. This year Canon started including the feature that enables similar apps to be used by its higher-end cameras; previously it was all low-end devices. I had a chance on a recent holiday to try out the CameraWindow app on the just-updated S110. Here’s what I was able to do with my iPhone 5.

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Access camera photos on your phone

The way it works is simple: both the camera and your iPhone join the same Wi-Fi network. (If a Wi-Fi network is not available, the Canon PowerShot camera will create a local Wi-Fi network that can be used solely for the purpose of reviewing and transferring photos.) You start off by pairing the iPhone and the camera together. Upon the initial connection there are a few steps to complete, but the Camera will remember the nickname of the iPhone it paired with to make future connections fast and easy.

Once the connection is established, you can either review the photos from your camera or from the iPhone. When you see a photo you like, you can transfer it from the camera to the Photo Library on the iPhone. As soon as the photos are on your iPhone, you can then use any number of applications to modify and share. I was able to use iPhoto on my iPhone 5 to create a great gallery that documented our trip, and was also able to share the images in my iCloud Photo Stream.

Update location information remotely

Another interesting feature of CameraWindow is its ability to record your GPS location when taking pictures. You set up the app to record your location information to a log while you take photos with your Canon PowerShot camera. When you are finished, you pair up your camera with your iPhone and elect to add the location information to the photos you just took. The photos on the camera are then updated with the latitude and longitude information. No need to transfer the photo to your iPhone first in order to perform this operation. The photos stay on the camera making the whole process quick and easy.

Canon’s CameraWindow works with iPads and Android(s GOOG) devices as well. The functionality provided in an app like CameraWindow is a great way to extend the capabilities of my point-and-shoot camera. It’s a handy way to get photos off of the camera when in the field and quickly edit and share them with family and friends, as well as update the information of each photo while it is still on the camera.

While some have already written off the era of the compact point-and-shoot camera entirely, I still feel that there is a need for a better optics and saving the original RAW image file when it comes to taking truly great photos. Looking beyond the compact market, Canon has also been introducing this smart app strategy into their DSLR lineup. So it all just depends on how much you are willing to spend on the ability to take better photos. With Canon pairing with smartphones like the iPhone 5 using their CameraWindow app, it’s a good way to have the best of both worlds.

The point-and-shoot camera market is dying because the cameras don’t do what their users really want, which is to post directly from the picture-taking device to email, or the facebook or other social medium. Unless the camera manufacturers recognise this and make a smartcamera (or get their ‘real’ cameras inside smartphones), their prospects in this market are pretty bleak.